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Michigan may be the hub of the US auto industry, but it’s also where car insurance costs are the highest, according to carinsurancequotes.com. (http://www.carinsurancequotes.com/car_insurance-costs) Michigan residents spend an average of 8 percent of their median household income on car insurance. The District of Columbia, Louisiana and Kentucky follow with the next highest rates. Car insurance costs the least in Hawaii, North Carolina and Massachusetts. But no matter where you live, paying less is always best.